Biting the land that feeds you

The New Acland coal mine is a controversial project 157km west of Brisbane, Queensland. It is located next to the township of Acland and 10km from the larger centre of Oakey. The mine is controversial because of its location in an agricultural area and the impacts it has on the local community, farms and health. These impacts include the majority of the Acland population moving away from the town, the acquisition of 160 agricultural properties and significant dust and noise pollution.

Rather than discussing these impacts, the mine’s owners, the New Hope Group, emphasise the economics of the project, based on economic assessments they have commissioned. This paper looks at the economic assessments of the New Acland coal project and considers how the techniques used ignore the real costs and exaggerate the benefits of the project.

We identify three steps through which the assessments have delivered inaccurate and misleading information about the project: ignoring local impacts, emphasising ‘indirect’ jobs and avoiding cost-benefit analysis.

Step one – ignore local impacts

Before the New Acland Project began in 2001, 64 families lived in the township of Acland. A study for Rio Tinto estimated the economic value of impacts on rural communities in the Hunter Valley at $38 million per household displaced, but no value has been placed on those displaced by the New Acland Project. With a third expansion of the New Acland Project currently being considered there is only one remaining resident in Acland.

No economic assessment of the New Acland Project considers the impacts of the project on agriculture and the local businesses that depend on agriculture. Nor do the economic assessments mention noise, dust and mental health stresses and the impact these have on the health of local people, despite medical groups having expressed concern about health effects.

Step two – emphasise ‘indirect’ jobs

Rather than direct impacts, which are overwhelmingly negative, New Hope emphasises the number of ‘indirect’ jobs it claims to be responsible for. Despite employing only around 300 people, the company claims the project would “create” up to 2,850 indirect jobs. To calculate this number they have used methods described as “biased” by the Australian Bureau of Statistics and “abused” by the Productivity Commission. They have also ignored the jobs destroyed in other industries as large amounts of land are taken over.

Step three – avoid cost-benefit analysis

The economic assessments of the New Acland Project do not rely on standard cost-benefit analysis, despite this being the method favoured by the Queensland planning department. If cost-benefit analysis of the project was conducted, difficult issues such as local impacts and distribution of benefits would be addressed. Instead, the company relies on non-standard methods, such as ‘Rapid Cost Benefit Analysis’, which despite the name does not analyse any costs, nor quantify many benefits.

Based on the certain negative effects on the local community, but uncertain benefits to the wider economy, The Australia Institute concludes that the New Acland Project and its latest expansion proposal is likely to reduce economic wellbeing of the local community and Queensland and should not go ahead.

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The Australia Institute is the country’s most influential progressive think tank. We conduct research on a broad range of economic, social and environmental issues in order to inform public debate and bring greater accountability to the democratic process.